Sky Moves to Halt New Borrowing on Legacy Vaults

gm, Defiers!

These are the biggest stories in DeFi and crypto:

• Sky may stop new borrowing on five legacy vaults
• LlamaRisk proposed borrowing speed limits for Aave
• Bitcoin fell below $72,000, and ether neared $2,000
• Binance says hack losses are covered, proof pending
• Tether's Tron freezes name targets before they execute

Three DeFi lenders moved this week to make new borrowing harder. Bitcoin fell below $72,000 on the same day the third proposal landed. What are the lenders are guarding against, and who pays for it?

Sky, formerly MakerDAO, issues the USDS and DAI stablecoins against collateral. On Thursday its risk advisor, BA Labs, proposed stopping new borrowing from five legacy ether and wstETH vault types. Those vaults hold 376.33 million USDS of debt across 771 positions. Aave is the largest DeFi lender, and LlamaRisk manages its risk settings. On Wednesday LlamaRisk proposed a borrowing speed limit that refills a capped buffer every 30 minutes. Moonwell, a lender on Base and Optimism, cut collateral limits the same day.

Moonwell, Binance and Aave each had an attack to deal with in the past four months. In August an attacker took about $8.7 million from Moonwell by pushing up the price of MAMO and borrowing against it. Binance's October hack, which it puts at $6.3 billion, reached Aave next. A wallet in the attacker's cluster borrowed WETH on Aave, and LlamaRisk froze Aave markets across chains. Aave reopened them on Oct. 30 after removing about $3.7 billion of unused V3 borrowing capacity. Sky's total value locked fell 15% in the week to Nov. 7. On Nov. 10 LlamaRisk proposed winding down $1.33 billion of Aave Core collateral.

Aave's Core wind-down covers $1.03 billion, and Sky's five vault types hold $376 million. LlamaRisk and BA Labs both leave existing loans open in their first steps. Both shut borrowing routes that an attacker, or a broken price feed, could use.

Borrowers pay for this protection. Bitcoin fell below $72,000 and ether neared $2,000 on Thursday. Lower limits leave a borrower less room to add debt or swap collateral during a drawdown.

DeFi lenders now treat an exchange hack as a collateral risk.

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BTC $71,452 ▼ 3.92%	ETH $2,014 ▼ 2.64%	SOL $81.35 ▼ 3.72%	XRP $1.03 ▼ 2.51%	BNB $654 ▼ 4.56%
Prices & 24h change as of 22:09 11/12/2026 UTC. Full list

WATCH

Should a Chain Be Able to Undo a $6 Billion Hack?

Lorenzo Valente, ARK Invest's director of research for crypto, wants chains to be able to reverse extreme hacks for two to three years. Columbia's Omid Malekan says a chain with that button will have it pushed. They debated it on The Defiant after Binance's $6.3 billion hack.

DEFI

Sky Advisor Proposes Halting New Core Vault Borrowing

BA Labs, Sky's risk advisor, proposed halting new stablecoin borrowing through five legacy Core Vault types: ETH-A, ETH-B, ETH-C, WSTETH-A and WSTETH-B. The vaults hold 376.33 million USDS of debt across 771 open positions. Their debt fell 25.18% in the past year, and 177 vaults closed. Existing borrowers could still repay, add collateral and withdraw it. BA Labs cited fewer attack vectors as the reason. The change needs an executive spell, and BA Labs set no execution date.

Sky Advisor Proposes Halting New Core Vault Borrowing

Sky risk advisor BA Labs proposes zero debt ceilings for five ETH and wstETH Core Vault types, stopping new borrowing while preserving existing loans.

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Why this matters: Sky's oldest minting route would close to new debt. Borrowers who top up these vaults in a drawdown would have to use another vault type or another lender.

DEFI

LlamaRisk Proposes Borrowing Speed Limits for Aave V3

LlamaRisk proposed a borrowing speed limit for Aave V3. Each reserve would keep a buffer of borrowing room above its debt: 10% of that debt, with a $1 million floor and a $25 million ceiling. An automated agent would refill the buffer after a 30-minute delay. Known large borrowers would get a separate route run by Aave Labs and LlamaRisk. LlamaRisk posted it as a discussion-stage proposal. Moonwell cut collateral factors on Base and Optimism and dropped VELO and wrsETH as collateral.

Why this matters: A speed limit gives Aave's guardian time to freeze a market during an attack. Large borrowers would depend on a steward-run route with no published eligibility rules.

MARKETS

Bitcoin Breaks Below $72,000 as Multiweek Slide Deepens

Bitcoin fell below $72,000 on Thursday, and Coinbase recorded a $71,500 low at 9:44 a.m. ET. That was about 16% below its $84,856 high of the past four weeks. Coinalyze counted $368 million of liquidations over 24 hours, mostly longs. Ether neared $2,000 after a 16.1% loss over about a week, against 8.9% for bitcoin. U.S. ether ETFs had $144.8 million of net outflows on Nov. 11, their fifth straight day of withdrawals.

Why this matters: Collateral prices are falling while lenders cut borrowing limits. Leveraged ether borrowers have less room to add debt or swap collateral before liquidation.

HACKS

Binance Says Hack Assets Covered, Reserve Proof Pending

Binance said it fully covered customer assets hit by its October hack, which it estimated at $6.3 billion. It reported 98% replenishment on Nov. 4, after buying replacement tokens with company funds. A new Proof of Reserves snapshot is out, but its zero-knowledge proof is still pending, and Binance gave no date for it. Arkham said wallets tied to the Bitget hacker sent 847.26 BTC into CoinJoin, worth $63.43 million, starting Nov. 6.

Why this matters: Until the proof is out, users cannot check Binance's 1:1 backing themselves. Binance replaced the assets with its own money, and the attackers still hold the stolen crypto.

SECURITY

USDT Freeze Proposals on Tron Leave Time to Move Funds

Tether's process for freezing USDT on Tron names the target address in a public proposal before a second signer executes the freeze, a FreezeCheck study found. The median gap across 4,199 addresses was 9.7 minutes, and 30% waited over an hour. Addresses still frozen sent out 65.4 million USDT during those windows. The Defiant checked the largest case onchain: a 15.2 million USDT transfer 64 minutes before its freeze on Sept. 20.

Why this matters: Hack victims count on a freeze to hold stolen funds. A public proposal shows the target first, so a fast holder can move USDT before the second signature.

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